***

Correct answers will receive 1 mark.  Incorrect answers will

receive -0.75 mark.  An answer left blank will receive 0 marks.  So decide

carefully before you answer.***

A market for apartments is characterized by the following functions:

Demand: P = 2720 - 0.1Q

Supply: P = 433 + 0.4Q

Suppose the government imposes a price ceiling at $1285.

Calculate the loss of surplus for the renters who are no longer able to find an apartment to rent.

Do not enter the negative sign.

The market for rice currently is at the equilibrium.  Demand for rice is P = 39 - 0.0015Q and supply is P = 3.8 + 0.001Q.  Then the government imposes a price ceiling at $11.

By how much will total surplus change? 

If it is a negative change (a decrease) be sure to enter the negative sign.  E.g. -$50

A market is characterized by the following functions:

Demand: P = 280 - 0.34Q

Supply: P = 40 + 0.06Q

Suppose the government imposes a price floor at $212.

Calculate the producer surplus.

***

Correct answers will receive 1 mark.  Incorrect answers will

receive -0.75 mark.  An answer left blank will receive 0 marks.  So decide

carefully before you answer.***

Consumers will be better off if the tax is imposed in the market (S^T) rather than the quota (Q₁).

A market is characterized by the following functions:

Demand: P = 180 - 0.14Q

Supply: P = 20 + 0.06Q

Suppose the government imposes a quota at 400.

Calculate the deadweight loss.

The diagrams below show the market for salmon sushi rolls.

Suppose consumers learn that salmon increases brain health, and at the same time improvements in water quality increase the salmon population.  Which diagram illustrates what will happen in the market for salmon sushi rolls?

Write the letter representing the correct diagram.